The Perils and Pitfalls of Buy Here Pay Here Car Dealers

When it comes to buying an automobile we all have several choices as to where to purchase a vehicle. You can buy a car from a private party, the corner used car lot or from a new and used car dealership. Each option has merit, but sometimes your choices are limited by your budget. Typically with private party car buying you are paying in cash or have arranged a loan through your bank which can sometimes be a hassle. However the way that most people buy vehicles is from a car lot or dealership that not only has financing available, but their vehicles often include some type of warranty. This article is to provide you with some information about the perils and pitfalls of buy here pay here car dealers and how they operate.

What is a Buy Here Pay Here Dealer

The main purpose of the Buy Here Pay Here (BHPH) automobile dealership is to cater the buyer that has bad credit and even those with terrible credit. Their typical customers are unable to get auto loans conventionally because of their poor credit standing so these BHPH dealerships offer in house financing so practically anyone can buy and finance a vehicle regardless of their credit score. The car lot or dealer not only sells the vehicle, but also act as the lender and finances the purchase. The buyer makes their payments to the selling dealer on a weekly or bi-weekly schedule that usually correlates with the pay period of the buyers/borrowers job.  This way the payments are smaller and they are due on the same or next day that they get paid from their employer.

The Offerings of BHPH Car Dealerships

The inventory and selection of vehicles offered by the Buy Here Pay Here lot typically consist of used vehicles that often have high miles. These are not necessarily bad or junk cars, but they are less costly and this limits the amount of risk that is taken on by the owner of the dealership. They are financing people with credit problems and they want to reduce their exposure as much as possible. Repossessing and taking back cars from their customers that don’t fulfill their part of the installment agreement is not uncommon. In fact this is a very costly part of operating a BHPH establishment. Many of these dealers also offer extended warranties on the vehicles they sell and finance which is very good idea because nobody wants to make payments on a car that is broken down or inoperable. These warranties are sometimes included in the price of the vehicle or added into the payments which is a source of additional income for the dealer, but depending on how you look at it, this could a win/win for both parties.

Buy Here Pay Here Caveats

Doing business with a buy here pay here car dealer is not for everyone, but if you need a vehicle and your have bad credit then this might be your only choice. When I say bad credit I mean real bad credit, because there are many dealers that work with sub-prime auto lenders and finance companies that will be able to finance people with less than great credit, but only if the dealer has an association or relationship with these types of lenders. So choosing the best dealer for your particular situation is important. Buying and financing a vehicle though a dealer that has in house financing can be quite costly, but that is to be expected when you need to finance and you have terrible credit. In most cases you are paying more for the car than it is worth, you will be paying a high interest rate for your vehicle and you are often expected to make your payments in person at the dealership.

A word to the wise is sufficient, but sometimes you don’t have too many choices when you need an automobile to get to work and do what needs to be done every day. Sometimes people need a second chance when it comes to financing a vehicle and that is where this type of dealer comes in to play. Yes, there are perils and pitfalls of buy here pay here car dealers, but that may be the best answer when your financial situation calls for a solution to your transportation needs. Choose from a wide range of new and used cars for sale online at and find fantastic deals on your dream car in your local area or nationwide from private sellers to trade dealers.

Leave a Comment